In this Act, except where the context otherwise requires—

For the purpose of determining the number of creditors for whose benefit a deed is made, any two or more joint creditors shall be treated as a single creditor.

A deed of arrangement which either is expressed to be or is in fact for the benefit of a debtor’s creditors generally shall be void unless, before or within twenty-one days after the registration thereof, or within such extended time as the High Court or the Court having jurisdiction in bankruptcy in the district in which the debtor resided or carried on business at the date of the execution of the deed may allow, it has received the assent of a majority in number and value of the creditors of the debtor.

The list of creditors annexed to the affidavit of the debtor filed on the registration of the deed of arrangement shall be prima facie evidence of the names of the creditors and the amounts of their claims.

The assent of a creditor for the purposes of subsection (1) shall be established by his executing the deed of arrangement or sending to the trustee his assent in writing attested by a witness, but not otherwise.

The trustee shall file with the Registrar at the time of the registration of a deed of arrangement, or, in the case of a deed of arrangement assented to after registration, within twenty-eight days after registration or within such extended time as the High Court or the court having jurisdiction in bankruptcy in the district in which the debtor resided or carried on business at the date of the execution of the deed may allow, a statutory declaration by the trustee that the requisite majority of the creditors of the debtor have assented to the deed of arrangement, which declaration shall, in favour of a purchaser for value, be conclusive evidence, and, in other cases, be prima facie evidence, of the fact declared.

In calculating a majority of creditors for the purposes of this section, a creditor holding security upon the property of the debtor shall be reckoned as a creditor only in respect of the balance (if any) due to him after deducting the value of that security, and creditors whose debts amount to sums not exceeding two hundred shillings shall be reckoned in the majority in value, but not in the majority in number.

The registration of a deed of arrangement under this Act shall be effected in the manner prescribed by subsection (2).

A true copy of the deed, and of every schedule or inventory thereto annexed, or therein referred to, shall be presented to and filed with the Registrar within seven clear days after the execution of the deed (in the same manner as a bill of sale given by way of security for the payment of money is required to be filed), together with an affidavit verifying the time of execution, and containing a description of the residence and occupation of the debtor, and of the place or places where his business is carried on, and an affidavit by the debtor stating the total estimated amount of property and liabilities included under the deed, the total amount of the composition (if any) payable thereunder and the names and addresses of his creditors.

No deed shall be registered under this Act unless the original of the deed, duly stamped with the proper stamp duty, is produced to the Registrar at the time of registration.

Where the place of business or residence of the debtor who is one of the parties to a deed of arrangement, or who is referred to therein, is situated in some place within an area in respect of which a district registry of the High Court has been established, the Registrar shall, within three clear days after registration in the principal registry, and, in accordance with the prescribed directions, transmit a copy of the deed to the district registrar of the area in which that place of business or residence is situated.

Every copy so transmitted shall be filed, kept and indexed by the district registrar in the prescribed manner, and any person may search, inspect, make extracts from and obtain copies of the registered copy in the same manner and upon the same terms, as to payment or otherwise, as near as may be, as in the case of deeds registered under this Act.

The trustee under a deed of arrangement shall, within fourteen days from the date on which the statutory declaration certifying the assent of the creditors is filed give security in the prescribed manner to the judge or registrar of the court having jurisdiction in bankruptcy in the district in which the debtor resided or carried on business at the date of the execution of the deed, in a sum equal to the estimated assets available for distribution amongst the unsecured creditors as shown by theaffidavit filed on registration to administer the deed properly and account fully for the assets which come to his hands unless a majority in number and value of the debtor’s creditors, either by resolution passed at a meeting convened by notice to all the creditors, or by writing addressed to the trustee, dispense with his giving such security:

Provided that, when such a dispensation has been so given, the trustee shall forthwith make and file with the Registrar a statutory declaration to that effect, which declaration shall, in favour of a purchaser for value, be conclusive evidence, and in other cases be prima facie evidence, of the facts declared.

If a trustee under a deed of arrangement fails to comply with the requirements of this section, the court, having jurisdiction in bankruptcy in the district in which the debtor resided or carried on business at the date of the execution of the deed, on the application of any creditor and after hearing such persons as it may think fit, may declare the deed of arrangement to be void, or may make an order appointing another trustee in the place of the trustee appointed by the deed of arrangement.

A certificate that the security required by this section has been given by a trustee, signed by the registrar to whom it was given and filed with the Registrar, shall be conclusive evidence of the fact.

All moneys received by a trustee under a deed of arrangement shall be banked by him to an account to be opened in the name of the debtor’s estate.

In calculating a majority of creditors for the purposes of this section, a creditor holding security upon the property of the debtor shall be reckoned as a creditor only in respect of the balance (if any) due to him after deducting the value of such security, and creditors whose debts amount to sums not exceeding two hundred shillings shall be reckoned in the majority in value but not in the majority in number.

Every trustee under a deed of arrangement shall, at such times as may be prescribed, transmit to the Official Receiver in Bankruptcy, or as he directs, an account of his receipts and payments as trustee, in the prescribed form and verified in the prescribed manner.

If any trustee fails to transmit such account, he shall be guilty of an offence and liable, on conviction by a subordinate court of the first class, to a fine not exceeding one hundred shillings for each day during which the default continues, and the High Court, for the purpose of enforcing the provisions of subsection (1) of this section, shall exercise, on the application of the Official Receiver, all the powers conferred on the court by subsection (2) of section 100 of the Bankruptcy Act (Cap. 53) in cases of bankruptcy.

The accounts transmitted to the Official Receiver in pursuance of this section shall be open to inspection by the debtor or any creditor or other person interested, on payment of the prescribed fee, and copies of or extracts from the accounts shall, on payment of the prescribed fee, be furnished to the debtor, the creditors or any other persons interested.

In this section, “trustee” includes any person appointed to distribute a composition or to act in any fiduciary capacity under any deed of arrangement, and “prescribed” means prescribed by rules under the Bankruptcy Act.

Where, in the course of administration of the estate of a debtor who has executed a deed of arrangement, or within twelve months from the date when the final accounts of the estate were rendered to the Official Receiver, an application in writing is made to the Official Receiver by a majority in number and value of the creditors who have assented to the deed for an official audit of the trustee’s accounts, the Official Receiver may cause the trustee’s accounts to be audited, and in that case all the provisions of the Bankruptcy Act (Cap. 53) relating to the institution and enforcement of an audit of the accounts of a trustee in bankruptcy (including the provisions as to fees) shall, with necessary modifications, apply to the audit of the trustee’s accounts, and the Official Receiver may require production on the audit of a certificate for the taxed costs of any advocate whose costs have been paid or charged by the trustee, and may disallow the whole or any part or any costs in respect of which no certificate is produced.

The Official Receiver may determine how and by what parties the costs, charges and expenses of and incidental to the audit (including any prescribed fees chargeable in respect thereof) are to be borne, whether by the applicants or by the trustee or out of the estate, and may, before granting an application for an audit, require the applicants to give security for the costs of the audit.

The High Court may, whenever it is expedient to appoint a new trustee under a deed of arrangement and it is found inexpedient, difficult or impracticable so to do without the assistance of the Court, make an order for the appointment of a new trustee; and, in particular and without prejudice to the generality of the foregoing provision, the Court may make an order for the appointment of a new trustee in substitution for a trustee who is convicted of felony or is a bankrupt.

An order under this section, and any consequential vesting order or conveyance, shall not operate further or otherwise as a discharge to any former trustee than an appointment of a new trustee under any power for that purpose contained in any deed of arrangement would have operated.

Where a deed of arrangement is void by reason that the requisite majority of creditors have not assented thereto, or, in the case of a deed for the benefit of three or more creditors, by reason that the debtor was insolvent at the time of the execution of the deed and that the deed was not registered as required by this Act, but is not void for any other reason, and a receiving order is made against the debtor upon a petition presented after the lapse of three months from the execution of the deed, the trustee under the deed shall not be liable to account to the trustee in the bankruptcy for any dealings with or payments made out of the debtor’s property which would have been proper if the deed had been valid, if he proves that at the time of those dealings or payments he did not know, and had no reason to suspect, that the deed was void.

Where a receiving order is made against a debtor under section 102 of the Bankruptcy Act (Cap. 53), this section shall apply if the receiving order was made after the lapse of three months from the execution of the deed.

If the trustee under a deed of arrangement which either is expressed to be or is in fact for the benefit of the debtor’s creditors generally serves in the prescribed manner on any creditor of the debtor notice in writing of the execution of the deed and of the filing of the statutory declaration certifying the creditors’ assents with an intimation that the creditor will not after the expiration of two months from the service of the notice be entitled to present a bankruptcy petition against the debtor founded on the execution of the deed or on any other act committed by him in the course or for the purpose of the proceedings preliminary to the execution of the deed as an act of bankruptcy, that creditor shall not, after the expiration of that period, unless the deed becomes void, be entitled to present a bankruptcy petition against the debtor founded on the execution of the deed or any act so committed by him as an act of bankruptcy.

Where a deed of arrangement referred to in subsection (1) has become void by virtue of this Act or any enactment repealed by this Act, the fact that a creditor has assented to the deed shall not disentitle him to present a bankruptcy petition founded on the execution of the deed of arrangement as an act of bankruptcy.

Save as otherwise expressly provided by this Act, nothing in this Act shall be construed as repealing or shall affect any provision of the law for the time being in force in relation to bankruptcy or shall give validity to any deed or instrument which by law is an act of bankruptcy or void or voidable.